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Savvy multifamily companies are turning to technology to generate pricing options that maximize revenue, industry experts say. The companies are implementing revenue management software solutions to evaluate demand, unit type availability, net rental price, lease term, vacancy statistics, seasonal trends and other factors to get top value from their properties.

Steve Lefkovits, founder, president and CEO of Joshua Tree Consulting, told attendees at NAHB Multifamily’s Pillars of the Industry Conference in San Diego in March that firms using revenue management programs such as Lease Rent Options from Rainmaker Group, M/PF YieldStar Price Optimizer from RealPage and Yardi Revenue Management can boost revenues by 2% to 4%.

Georgianna W. Oliver, founder and CEO of EverGreen Solutions, a national technology consulting firm serving the commercial and multifamily real estate industry, estimates about 3,000 apartment communities are already using revenue management software.

But there is growing interest in the technology, industry experts concur. Revenue management software analyzes a wide range of variables, including competitive influences and historical demand, current and historical lease activity, lease duration, move-in dates and other metrics.

And one recent survey of multifamily executives found as many as 30% plan to invest in revenue management technology this year. As Lefkovits notes, there’s good reason for the interest, especially in a deflationary environment: using statistical, non-emotional demand functions and data enables firms to increase revenue and market share, and to optimize its pricing using demand information.

Shawn Mahoney, CIO of Windsor Communities, couldn’t agree more. Windsor, affiliated with the General Investment & Development Companies of Boston, implemented Rainmaker’s LRO revenue optimization system at 40 communities after a successful pilot test.

The test conclusively demonstrated lease rent lift, Mahoney said, noting, “We evaluated LRO’s effectiveness with ‘same store’ pilot tests where six communities set lease rents using LRO, and six control communities used our managers’ existing method for rate-setting.” Mahoney called the results “compelling.”

Windsor, which began the software roll-out in 4Q ’08, will have more than 10,000 units using the system when its implementation is complete. Mahoney said the company will realize two benefit streams. “The first is that LRO gives optimized price recommendations faster than our community managers usually price. And second, it provides an automated, standardized, and replicable process for each community and market for renewing lease rates and setting prices. It is the right tool for pricing,” he said.

Bruce Barfield, president of the Rainmaker Group, said revenue management software enables property managers to price more confidently by giving them a more comprehensive picture of the market and their competition. In addition, he noted, “When managers rely on automated lease rent recommendations they are free to focus attention on selling their communities more effectively.”

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